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"Dollar-yen looks like a lemming hurling itself off a cliff, and the yen bulls may end up feeling a bit like lemmings in due course. Recession, capital outflows and long speculative positions, yet still the yen rallies towards USD/JPY 100."
- Societe Generale (based on Business Recorder)
Pair's Outlook
Even though the Greenback managed to edge higher against the Yen yesterday, thus, confirming the bullish recovery, but gains accounted for only 20 pips. With such a small rally, risks of the USD/JPY currency pair sustaining another serious loss persist. As a result, the Buck could drop under the 106.00 major level, the lowest level in almost 20 months. The closest area to limit the losses rests around 105.70, represented by the Bollinger band, whereas the second target is the 105.20 mark, namely the 20-month low. Furthermore, a complete breach of the 106.00 level might spark the BoJ to intervene, ultimately causing investors to sell the Japanese currency.
Traders' Sentiment
Today 72% of traders hold long positions, unchanged since Monday. At the same time, the share of buy orders surged from 45 to 72%.
© Dukascopy Bank SA